# Labour/Labor :: Two or More Types : Problems

 Problems » Solutions
01. From the following data, calculate labour variances; The budgeted labour force for producing product A is:

25 Semi-skilled workers @ Rs. 7.50 per hour for 50 hours
15 Skilled workers @ Rs. 8.25 per hour for 50 hours

The actual labour force employed for producing A is:

28 Semi-skilled workers @ Rs. 7.00 per hour for 50 hours.
14 Skilled workers @ Rs. 8.50 per hour for 40 hours

Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = – LMV/LGCV = 0 ; LYV/LSUV = ;]

02. A contract job is scheduled to be completed in 40 weeks with a labour complement of 80 skilled operatives, 50 semi-skilled operatives and 70 unskilled operatives. The standard weekly wages of each type of operatives are – skilled Rs. 250 semi- skilled Rs. 156 and unskilled Rs. 124. The work is actually completed in 42 weeks with a labour force of 75 skilled, 50 semi-skilled and 80 unskilled operatives and the actual weekly wages rates average Rs. 265 for skilled: Rs. 140 for semi-skilled and Rs. 120 for unskilled labour. Analyse the variances in the labour cost due to various reasons.

Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = – LMV/LGCV = 0 ; LYV/LSUV = ;]

03. The standard labour force of Mahan Plastics Ltd. is as under:
Rs.
60 skilled men at Rs. 5.00 Paise per hour for 25 hours7,500
80 semi – skilled men at Rs. 3.50 per hour for 40 hours11,200
18,700
Rs.
75 skilled men at Rs. 6.00 per hour for 24 hours10,800
100 semi – skilled men at Rs. 3.40 per hour for 42 hours14,280
25,080
Analyse the Labour Variances.

Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = – LMV/LGCV = 0; LYV/LSUV = ;]

04. The following data have been taken from the cost records of EMILY Ltd.
StandardActual
Grade A 100 workers @ Rs. 12 p.h.Grade A 122 workers @ Rs. 12.50 p.h.
Grade B 75 workers @ Rs. 10 p.h.Grade B 88 workers @ Rs. 9.50 p.h.
Budgeted hours 80 per workerActual Hours 80 per worker
Standard yield 4,000 unitsActual production 4,100 units
Calculate all labour variances.

Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = – LMV/LGCV = 0 ; LYV/LSUV = ;]

05. Given the following particulars, analyse the labour variance.
Standard Actual
Labour No.of
persons
Rate Hours
worked
Labour No. of
persons
Rate Hours
worked
Grade I 90 Rs. 10 100 Grade I 85 Rs. 12 120
Grade II 55 Rs. 8 100 Grade II 55 Rs. 7.50 120
Grade III 40 Rs. 6 100 Grade III 50 Rs. 7 120
Standard rate production:200 units Actual production:190 units

Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = – LMV/LGCV = 0 ; LYV/LSUV = ;]

06. Calculate variances from the following data:
Standard Actual
Number of men employed
Output in units
Number of working days in a month
Average wages per man per month
80
4,000
25
Rs. 1,200
90
4,180
24
Rs. 1,140

Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = – LMV/LGCV = 0; LYV/LSUV = ;]

07. A contract job is scheduled to be completed in 40 weeks with following labour force:
 Skilled 140 weekly wage Rs. 500 Semi –skilled 70 " " Rs. 450 Unskilled 90 " " Rs. 350
The work is actually completed in 44 weeks with the following labour force
 Skilled 150 weekly wage Rs. 515 Semi –skilled 80 " " Rs. 440 Unskilled 70 " " Rs. 365
Analyse variances in labour cost.

Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = – LMV/LGCV = 0 ; LYV/LSUV = ;]

08. Standard labour hours and rate for production of Article SARD are given below:-
Hrs Rate
(Rs.)
Total
(Rs.)
Skilled Workers 8 15 per hour 120
Semi-Skilled Workers 7 12 per hour 84
Unskilled Workers 5 8 per hour 40
244
Actual data
 Rate Per hour (Rs.) Total (Rs.) Articles Produced 1,000 units Skilled Workers 7,800 hrs 16 1,24,800 Unskilled Workers 5,200 hrs 8.50 44,200 Semi-Skilled Workers 7,250 hrs 13.40 97,150 2,66,150
Calculate all possible labour/labor variances.

Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = – LMV/LGCV = 0 and LYV/LSUV = ;]

09. The details regarding the composition and the weekly wage rates of labour force engaged on a job scheduled to be completed in 50 weeks are as follows:
 Category of Worker Standard No. of Labour Weekly Wage Rate per laborer Actual No. of Labor Weekly Wage Rate per labourer Skilled 70 250 70 260 Semi-Skilled 55 225 60 225 Unskilled 75 150 80 140
The work is actually completed in 60 weeks. Calculate the various labour variances.

Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = – LMV/LGCV = 0 ; LYV/LSUV = ;]

10. The standard of labour mix for producing an article in a particular week is:
45 men @ Rs. 12 per hour for 50 hours
25 women @ Rs. 10 per hour for 40 hours
15 boys @ Rs. 8 per hour for 50 hours.

But actual labour force used during that week was:

42 men @ Rs. 13 per hour for 55 hours.
20 women @ Rs. 11 per hour for 40 hours.
8 women @ Rs. 10 per hour for 40 hours.
13 boys @ Rs. 8.25 per hour for 60 hours.
You are required to calculate all possible labour/labor variances:

Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = – LMV/LGCV = 0 ; LYV/LSUV = ;]

11. The budgeted labour force for producing 1,000 articles ‘X’ is
Total
standard
Hours
Total
standard Cost
(Rs.)
40 men @ Rs. 5 per hour for 50hrs 2,000 10,000
25 women @ Rs. 3 per hour for 40 hrs 1,000 3,000
20 boys @ Rs. 2.50 per hour for 25 hrs 500 1,250
3,500 14,250
The actual data and related work force are as follows:
Articles produced, 1,000
Total
actual Hours
Total
Cost
(Rs.)
55 men @ Rs. 6 per hour for 50 hrs 2,750 16,500
20 women @ Rs. 2.50 per hour for 30 hrs 600 1,500
10 boys @ Rs. 3 per hour for 15 hrs 150 450
3,500 18,450
Calculate all possible Labour/Labor variances.

Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = – LMV/LGCV = 0;LYV/LSUV = ;]

12.
Standard
For
100 hours
Grade A : 80 workers @ Rs. 13 per hour
Grade B : 70 workers @ Rs. 11 per hour
Actual
For
100 hours
Grade A : 78 workers @ Rs. 12.50 per hour
Grade B : 72 workers @ Rs. 10 per hour
Calculate all possible Labour/Labor Variances

Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = – LMV/LGCV = 0 ;LYV/LSUV = ;]

13. The standard labour component and the actual labour component engaged in a week for a job areas under:
Skilled
workers
Semi-skilled
workers
Unskilled
workers
(a) Standard number of workers in the gang 28 12 10
(b) Standard wage rate
per hour (Rs.)
15 12 10
(c) Actual number of workers
employed in the gang during
the week
25 14 11
(d) Actual wage rate per hour (Rs.) 16 12 9
During the 40-hours working week, the gang produced 1,800 standard labour hours of work.
Calculate the different labour variances.

Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = – LMV/LGCV = 0 ; LYV/LSUV = ;]

14. The original standard rate of pay in a factory was Rs. 8 per hour. Due to settlement with trade unions, this rate of pay per hour is increased by 15%. During a particular period, 8,000 actual hours were worked whereas work done was equivalent to 6,400 hours. The actual labour cost was Rs. 76,800. Calculate labour variances.

Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = – LMV/LGCV = 0 ; LYV/LSUV = ;]

15. A large manufacturing company with a diverse range of products is developing the use of standard costing throughout its divisions. A full standard costing system has already been implemented in Division A, including the sue of mix and yield material variances, and attention has now turned to Division B where the main problem concerns labour.
Division B makes highly complex work stations which incorporate material handing, automatic controls and robotics. Manufacture is a team effort and the team specified for work station 26 comprises:
2 supervisors paid Rs. 8 per hour
10 fitters paid Rs. 6 per hour
6 electricians paid Rs. 6 per hour.
2 electronics engineers paid Rs. 7 per hour
4 labourers paid Rs. 4 per hour
Output is measured in standard hours and 90 standard hours are expected for every 100 clock hours. During a period the following data were recorded.
Actual hours Actual pay
Supervisors 170 Rs. 1,394
Fitters 820 4,920
Electricians 420 2,562
Electronics engineers 230 1,725
Labours 280 1,120
Total
 1,920
 11,721
1,650 standard hours were produced.
The factory director of Division B is anxious to gain the maximum information possible from the standard costing system. He sees no reason why the normal labour efficiency variance could not be divided into sub-variances in order to show separately the effects of non-standard team composition and team productivity in a similar fashion to the material usage variance which can be sub-divided into mix and yield.
You are required to calculate labour variances.

Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = – LMV/LGCV = 0;LYV/LSUV = ;]

 Practice Problems

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